"They (directors of the board) have also been put on notice to explain as to why action should not be taken against them as they have failed to perform their expected duties in a transparent and professional manner," a Punjab government release said here today quoting the Cooperative Societies Punjab Registrar Arvinder Singh Bains.
The department received complaints from the public and representations from the staff of the bank regarding alleged mismanagement by the board of directors, Bains said in the release.
"A detailed enquiry was got conducted by the Joint Registrar, Cooperative Societies, Jalandhar Division. This enquiry pointed out that Reserve Bank of India while conducting the inspection of the bank has put the bank on notice under Self Corrective Action for the second consecutive year."
The NPA of the bank has shot up to 48 per cent, which is very high.
The enquiry report has also indicated that certain individuals/families/groups of individuals have unduly been favoured by giving very high amount of advance to them and recovery is not effected which has grossly affected the financial health of the bank.
"The bank, in fact, has to recover Rs 99.69 crore from 44 big defaulters," he said.
"The management of the bank has woefully failed to protect the interests of the institution, its depositors, its members and share holders compelling the (Cooperative Societies) Department to step in and suspend the Board," he said.
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